In 2016, the Allen Corporation had sales of $61 million, total assets of $43 million, and total liabilities of $15 million. The interest rate on the company's debt is 5.8 percent, and its tax rate is 35 percent. The operating profit margin is 14 percent. a. Compute the firm's 2016 net operating income and net income. b. Calculate the firm's operating return on assets and return on equity. (Hint: You can assume that interest must be paid on all of the firm's liabilities.)

In 2016, the Allen Corporation had sales of $61 million, total assets of $43 million, and total liabilities of $15 million. The interest rate on the company's debt is 5.8 percent, and its tax rate is 35 percent. The operating profit margin is 14 percent. a. Compute the firm's 2016 net operating income and net income. b. Calculate the firm's operating return on assets and return on equity. (Hint: You can assume that interest must be paid on all of the firm's liabilities.)

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter2: Financial Statements, Cash Flow, And Taxes

Section: Chapter Questions

Problem 12P

See similar textbooks

Related questions

Q: Given the income statement below, Mega Trade Inc. wants to find the resulting net income for the…

A: Income statement: It implies to one of the financial statement's of the company that shows the…

Q: A firm has liabilities of ₱30,000 and owner’s capital of ₱90,000. Find the percentage of total…

A: Answer 1) Calculation of proportion of Total Liabilities to Total Assets Total Liabilities to Total…

Q: Schwert Corp. shows the following information on its 2015 income statement: sales = $215,000; costs…

A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

Q: G. C. Murphey’s 2016 financial statements show net income of $5,040 million, sales of $306,932…

A: Computation of return on sale: Return on sale = Net incomeSales×100 = $5,040 million$306,932…

Q: Following are financial statement numbers and ratios for Lockheed Martin Corp. for the year ended…

A: Solution:- Projected revenue means the expected revenue for the year after considering all the…

Q: You are a financial Manager of Chevron Corp. You need to assess the effectiveness of working capital…

A: Receivable Turnover Ratio: In business, the efficiency with which a firm collects on its receivables…

Q: Pearls, Inc. had sales in 2015 of $2.1 million. The common stockholders received $600,000 in cash…

Q: Q1) Omani Industrial Company has the following data which is extracting from its financial…

A: Given: Net profit margin =8%Sales =1500 thousand (OMR)Financial leverage multiplier =2.5 timesReturn…

Q: The following balance sheet and income statement pertain toGoode Corp., using the following…

A: Forecasted income statement is depend on future estimated revenue, cost of goods sold, operating…

Q: You are a financial Manager of Chevron Corp. You need to assess the effectiveness of working capital…

A: Formula: Inventory Turnover = Cost of sales / Average Inventory

Q: Omani Industrial Company has the following data which is extracting from its financial statements at…

A: Given, Net profit Margin = 12% Sales = 2,000,000 Financial leverage multiple = 2.5 Return on assets…

Q: You are a financial Manager of Chevron Corp You need to assess the effectiveness of working capital…

A: The Payable turnover shows how company is paying its trade payable or supplier and the…

Q: In the income statement below, ABC Trade Inc. wants to find the resulting net income for the year…

A: The net income is calculated as difference between total income and total expenses.

Q: A firm has net income of RM320,000 on sales of RM3,200,000. It’s assets total RM2,000,000, the…

A: Sustainable Growth Rate refers to Growth rate which can be maintained without additional financing…

Q: Analyzing the quality of firm earnings) Kabutell, Inc. had net income of ,$ 800,000 cash flow…

A: a) Quality of Earning Ratio=Cashflow from operations/ Net income =500,000/800,000=0.625= 62.5% hence…

Q: Please find below Financial Statement extracts of Nestle from year 2017 and 2018. Based on this…

A: The question is related to Ratio Analysis. The financial of year 2017 and 2018 are given. Required:-…

Q: Use the information below to answer the questions below. Luther Corporation Consolidated Income…

A: Operating margin helps to determine the operating efficiencies of the company, it helps to determine…

Q: Plano Corporation reported net income P24,000; net sales P400,000; and average assets P600,000 for…

A: Profit margin ratio is the ratio of net income with net sales of the business. It means how much a…

Q: Calculate the ratios for Adenta Ltd equivalent to the industry averages and as the Financial…

A: Number of Shareholders' = Share Capital / Per Share Price = GH¢ 3000,000/ GH¢ 0.25 = 12,000,000

Q: Kannan Carpets, Inc. has asked you to calculate the company's quick ratio for 2016. All you have is…

A: Total Liabilities and equity is equals to Total assets. Therefore, Total Liabilities and equity =…

Q: The following data were taken from the financial statements of Howard Corporation for the year ended…

A: Solution:- Introduction:- The following formula used to calculate return on assets as follows;-…

Q: Please find below Financial Statement extracts of Nestle from year 2017 and 2018. Based on this…

A: The financial analysis is the analysis of the business and its operations and functions in a view to…

Q: Please consider the following financial numbers for Carridine Company and then prepare answers to…

A: Net income is the income which is left with the company after paying off its expenses. Net income is…

Q: 1. Create an Income Statement. Tally Corp has the following information for 2014: Sales - $235,000…

A: An income statement is a financial report that indicates the revenue and expenses of a business. It…

Q: At this point (at the end of 2013), a company's weighted average capital cost (WACC) is 12%, and its…

A: Cash flows method help in determining the corporate value and the debt amount is to be deducted from…

Q: Home Depot reports net operating profit after tax (NOPAT) of $7,507 million in 2016. Its net…

A: Free cash flow to the firm = Net operating profit after tax + non cash expenditure - increase in…

Q: During 2016, Fly-Us-Again, Inc had total interest expense of P10,000, sales of P1,000,000, income…

A: Time interest earned ratio measures the firm’s ablity to make contractual interest payment. Time…

Q: Profitability and Asset Management Ratios You are thinking of investing in Nikki T's, Inc. You have…

A: Calculation of ROE:The ROE is 12.22%.Excel Spreadsheet:

Q: Reima Inc. 2016 income statement is presented below. Sales P3,500,00 Operating Costs 2,500,000…

A: Projected Net Income is shown as below

Q: In fiscal year 2018, Wal-Mart Stores (WMT) had revenue of $514.41 billion, gross profit of $129.10…

A: Here we will use the concpets of gross margin and net margin to answer the questions. Gross margin…

Q: Zach Ltd. produced the following data for the year 2015 – o Interest Income $4,650,000 o Capital…

A: Formula: Tax on interest income = Interest income amount x Tax rate. Tax on Capital gains = Realized…

Q: In 2017, Mix and Match Corporation (M&M’s) had a gross profit of RM27,000 on sales of RM110,000.…

A: Operating profit is referred to as the total income, which is generated by the company from the…

Q: Elgin Battery Manufacturers had sales of $1,000,000 in 2015 and their cost of goods sold is…

A: Income taxes is the amount of taxes and obligations which needs to be paid by the individual or…

Q: Krogen Grocer’s 2016 financial statements show net income of $1,680 million, sales of $153,466…

A: Ratio analysis means where different ratio of various years of years companies has been compared and…

Q: The most recent financial statements for Crosby. Inc., follow. Sales for 2018 are projected to grow…

A: EFN = (A/S) x (Δ Sales) - (L/S) x (Δ Sales) - (PM x FS x (1-d))A= Assets last year, S= Sales last…

Q: The most recent financial statements for Crosby, Inc., follow. Interest expense will remain…

A: Prepared Proforma Income Statement using excel:

Question

In 2016, the Allen Corporation had sales of

$61

million, total assets of

$43

million, and total liabilities of

$15

million. The interest rate on the company's debt is

5.8

percent, and its tax rate is

percent. The operating profit margin is

percent.

a. Compute the firm's 2016 net operating income and net income.

b. Calculate the firm's operating return on assets and return on equity. (Hint: You can assume that interest must be paid on all of the firm's liabilities.)

Video Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

In 2016, the Allen Corporation had sales of $62 million, total assets of $47 million, and total liabilities of $19 million. The interest rate on the company's debt is 5.9 percent, and its tax rate is 35 percent. The operating profit margin is 14 percent. a) Compute the firm's 2016 net operating income and net income. b) Calculate the firm's operating return on assets and return on equity.
In 2016, the Allen Corporation had sales of $60 million, total assets of $47 million, and total liabilities of $22 million. The interest rate on the company's debt is 5.6%, and its tax rate is 35%. The operating profit margin is 12%. Compute the firm's 2016 net operating income and net income. Calculate the firm's operating return on assets and return on equity. (Hint: You can assume that interest must be paid on all of the firm's liabilities.)
In 2016, the Allen corporation had sales of $67 million, total assets of $42 million, and total liabilities of $19 million. The interest rate on the company’s debt is 6.3 percent, and it’s tax rate is 35 percent. The operating profit margin is 14 percent A. Compute the firm’s 2016 net operating income and net income The firm’s 2016 net operating income is Round to two decimal places B. Calculate the firms operating return on assets and return on equity.
In 2016, the Allen corporation had sales of $63 million, total assets of $44 million, and total liabilities of $15 million. The interest rate on the company’s debt is 5.7 percent, and it’s tax rate is 35 percent. The operating profit margin is 14 percent. A. Compute the firm’s 2016 net operating income and net income The firm’s 2016 net operating income is Round to two decimal places.
In 2016, the Allen corporation had sales of $63 million, total assets of $44 million, and total liabilities of $15 million. The interest rate on the company’s debt is 5.7 percent, and it’s tax rate is 35 percent. The operating profit margin is 14 percent. Calculate the firm’s operating return on assets
In 2016, the Allen corporation had sales of $63 million, total assets of $44 million, and total liabilities of $15 million. The interest rate on the company’s debt is 5.7 percent, and it’s tax rate is 35 percent. The operating profit margin is 14 percent. B. Calculate the firm’s operating return on assets and return on equity. Operating return on assets is 20.05% Round to two decimal places. The return on equity is Round to two decimal places.
(Related to Checkpoint 4.3) (Analyzing Profitability) In 2016, the Allen Corporation had sales of $69 million, total assets of $48 million, and total liabilities of $18 million. The interest rate on the company's debt is 6.4 percent, and its tax rate is 35 percent. The operating profit margin is 11 percent. a. Compute the firm's 2016 net operating income and net income. b. Calculate the firm's operating return on assets and return on equity. (Hint: You can assume that interest must be paid on all of the firm's liabilities.) a. Compute the firm's 2016 net operating income and net income. The firm's 2016 net operating income is $ 7.59 million. (Round to two decimal places.) The firm's 2016 net income is $ million. (Round to two decimal places.)
(Related to Checkpoint 4.3) (Analyzing Profitability) In 2016, the Allen Corporation had sales of $69 million, total assets of $48 million, and total liabilities of $18 million. The interest rate on the company's debt is 6.4 percent, and its tax rate is 35 percent. The operating profit margin is 11 percent. a. Compute the firm's 2016 net operating income and net income. b. Calculate the firm's operating return on assets and return on equity. (Hint: You can assume that interest must be paid on all of the firm's liabilities.) a. Compute the firm's 2016 net operating income and net income. The firm's 2016 net operating income is $ million. (Round to two decimal places.)
(Related to Checkpoint 4.3) (Analyzing Profitability) In 2016, the Allen Corporation had sales of $66 million, total assets of $48 million, and total liabilities of $20 million. The interest rate on the company's debt is 6.1 percent, and its tax rate is 35 percent. The operating profit margin is 11 percent. a. Compute the firm's 2016 net operating income and net income. b. Calculate the firm's operating return on assets and return on equity. (Hint: You can assume that interest must be paid on all of the firm's liabilities.) a. Compute the firm's 2016 net operating income and net income. The firm's 2016 net operating income is $ kample Get more help. million. (Round to two decimal places.) Clear all Check answer
(Related to Checkpoint 4.3) (Analyzing Profitability) In 2016, the Allen Corporation had sales of $65 million, total assets of $40 million, and total liabilities of $18 million. The interest rate on the company's debt is 5.9 percent, and its tax rate is 35 percent. The operating profit margin is 14 percent. a. Compute the firm's 2016 net operating income and net income. b. Calculate the firm's operating return on assets and return on equity. (Hint: You can assume that interest must be paid on all of the firm's liabilities.) (...)
(Related to Checkpoint 4.3) (Analyzing Profitability) In 2016, the Allen Corporation had sales of $60 million, total assets of $44 million, and total liabilities of $17 million. The interest rate on the company's debt is 5.6 percent, and its tax rate is 35 percent. The operating profit margin is 13 percent. a. Compute the firm's 2016 net operating income and net income. b. Calculate the firm's operating return on assets and return on equity. (Hint: You can assume that interest must be paid on all of the firm's liabilities.) Question content area bottom Part 1 a. Compute the firm's 2016 net operating income and net income. The firm's 2016 net operating income is $enter your response here million. (Round to two decimal places.)
(Related to Checkpoint 4.3) (Analyzing Profitability) In 2016, the Allen Corporation had sales of $64 million, total assets of $42 million, and total liabilities of $25 million. The interest rate on the company's debt is 6.1 percent, and its tax rate is 35 percent. The operating profit margin is 12 percent. a. Compute the firm's 2016 net operating income and net income. b. Calculate the firm's operating return on assets and return on equity. (Hint: You can assume that interest must be paid on all of the firm's liabilities.) a. Compute the firm's 2016 net operating income and net income. The firm's 2016 net operating income is $☐ million. (Round to two decimal places.)